The Paycheck Protection Program (PPP) is a $953-billion business loan program established by the 2020 US Federal government Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help certain businesses, self-employed workers, sole proprietors, certain nonprofit organizations, and tribal businesses continue paying their workers.
To put it a little more simply, the PPP is a government program designed to help small businesses by offering a 100% forgivable loan to help pay for qualified business expenses. Forgivable means you do not pay back the loan.
If you have never received a PPP before, you can get a total of 5 months of pay. If you have received a PPP before, you can get an additional 2.5 months of pay. For example, if you generally make around $800 per week then you can qualify for approximately $16,000 as a 100% forgivable loan.
There is an accounting fee for preparing, and following up on your loan. We also prepare any other tax documents you might need such as a draft Schedule C. The fee is just 10% of your qualified PPP amount. Remember that you don’t have to pay back the loan once you receive forgiveness and included in the 10% fee is assisting you getting your loan forgiven afterwards.
If your PPP qualified amount is less than $4,500 then the accounting fee is 14% or $349 (whichever is larger).
Yes you can go directly to a participating bank and apply there. We haven’t seen any banks that are offering any help in person or over the phone for the PPP application. They’ve all directed folks to their website to a PPP portal page where it falls on the applicant to be able to understand what documents and information is required. Not surprisingly, the number of applications denied due to incorrect/missing info has been enormous. We have heard from some of the banks that most of the denials are people who actually qualify but they had uploaded the wrong info and didn’t follow the instructions. Accounting firms can’t charge just to submit an application for someone per the SBA guidance, but based on the required documents and navigating various tax forms, there is a fair amount of accounting work required as it relates to tax filing and calculating average payroll.